Exhibit 99.1
Contact: Peter W. Keegan
Senior Vice President
(212) 521-2950
Candace Leeds
V.P. of Public Affairs
(212) 521-2416
Joshua E. Kahn
Investor Relations
(212) 521-2788
LOEWS CORPORATION
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FOR IMMEDIATE RELEASE
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LOEWS CORPORATION REPORTS
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NET INCOME FOR THE THIRD QUARTER OF 2004
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NEW YORK, October 28, 2004-Loews Corporation (NYSE:LTR;CG) today reported
consolidated net income (including both the Loews Group and Carolina Group)
for the 2004 third quarter of $277.6 million, compared to a loss of $1,382.9
million in the 2003 third quarter. Consolidated net income for the first nine
months of 2004 was $728.5 million, compared to a loss of $978.1 million in the
comparable period of the prior year.
Net income (loss) and earnings per share information attributable to Loews
common stock and Carolina Group stock is summarized in the table below:
September 30,
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Three Months Nine Months
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(In millions, except per share data) 2004 2003 2004 2003
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<s> <c> <c> <c> <c>
Net income (loss) attributable to Loews common stock:
Income (loss) before net investment gains
(losses) (a) $ 245.9 $(1,573.3) $ 791.5 $(1,416.1)
Net investment gains (losses) (b) (21.7) 107.8 (191.4) 302.2
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Income (loss) from continuing operations 224.2 (1,465.5) 600.1 (1,113.9)
Discontinued operations-net - 55.8 - 55.4
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Net income (loss) attributable to Loews common stock 224.2 (1,409.7) 600.1 (1,058.5)
Net income attributable to Carolina Group stock 53.4 26.8 128.4 80.4
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Consolidated net income (loss) $ 277.6 $(1,382.9) $ 728.5 $ (978.1)
==========================================
Per share:
Income (loss) per share of Loews common stock:
Income (loss) from continuing operations $ 1.21 $ (7.90) $ 3.24 $ (6.01)
Discontinued operations-net - 0.30 - 0.30
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Net income (loss) per share of Loews common stock $ 1.21 $ (7.60) $ 3.24 $ (5.71)
==========================================
Net income per share of Carolina Group stock $ 0.92 $ 0.67 $ 2.21 $ 2.01
================================================================================================
Book value per share of Loews common stock:
September 30, 2004 $ 62.78
December 31, 2003 $ 60.92
================================================================================================
(a) Includes income of $116.5 (after tax) for the three and nine months ended
September 30, 2004 from an investee's sale of four ultra-large crude oil
tankers.
(b) Includes a loss of $352.9 (after tax and minority interest) for the nine
months ended September 30, 2004 related to CNA's sale of its individual
life insurance business.
Page 1 of 6
Quarter Ended September 30, 2004 Compared With 2003
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Net income attributable to Loews common stock for the third quarter of 2004
amounted to $224.2 million or $1.21 per share, compared to a loss of $1,409.7
million or $7.60 per share in the comparable period of the prior year.
Income before net investment gains (losses) attributable to Loews common
stock amounted to $245.9 million in the third quarter of 2004 compared to a
loss of $1,573.3 million in the comparable 2003 quarter. Results for 2004
include charges at CNA Financial Corporation, the Company's 91%-owned
subsidiary, of $158.8 million (after tax and minority interest) due to the
impact of Hurricanes Charley, Frances, Ivan and Jeanne, partially offset by
income of $116.5 million (after taxes) from Hellespont Shipping Corporation, a
49%-owned company, following the sale of its four ultra-large crude oil
tankers. The 2003 third quarter results include significant charges by CNA for
net prior year development of $1,345.8 million (after tax and minority
interest) and an increase in bad debt reserves for insurance and reinsurance
receivables of $298.9 million (after tax and minority interest).
Net income attributable to Loews common stock includes net investment losses
of $21.7 million (after tax and minority interest) compared to net investment
gains of $107.8 million (after tax and minority interest) in the comparable
period of the prior year. The decline is due primarily to losses at CNA
related to derivative securities held to mitigate the effect of changes in
long term interest rates on the value of the fixed maturity portfolio. While a
decrease in long term interest rates during the third quarter resulted in a
realized loss related to these derivatives, the fair value of CNA's fixed
maturity portfolio benefited from the interest rate movements resulting in an
increase in the Company's shareholders' equity. Consolidated net loss in the
third quarter of 2003 also includes a gain from discontinued operations of
$55.8 million, or $0.30 per share of Loews common stock, related to the sale
of a hotel property.
Net income attributable to Carolina Group stock for the third quarter of
2004 was $53.4 million, or $0.92 per Carolina Group share, compared to $26.8
million, or $0.67 per Carolina Group share, in the third quarter of 2003. The
Company is issuing a separate press release reporting the results of the
Carolina Group for the third quarter of 2004.
Consolidated revenues in the third quarter of 2004 amounted to $3.8 billion
compared to $3.9 billion in the comparable 2003 quarter. The decline in
revenues reflects CNA's sale of its group benefits business in December of
2003 and individual life insurance business in April of 2004.
Nine Months Ended September 30, 2004 Compared With 2003
- -------------------------------------------------------
Net income attributable to Loews common stock for the first nine months of
2004 amounted to $600.1 million or $3.24 per share, compared to a loss of
$1,058.5 million or $5.71 per share in the comparable period of the prior
year.
Income before net investment losses attributable to Loews common stock
amounted to $791.5 million in the first nine months of 2004 compared to a loss
of $1,416.1 million in the comparable period of the prior year. Results for
2004 include income from the Hellespont Shipping Corporation transaction and
the charges from the impact of the four hurricanes. The net loss in 2003
reflects CNA's unfavorable net prior year development and increase in bad debt
reserves as discussed above.
Page 2 of 6
Net income attributable to Loews common stock includes net investment losses
of $191.4 million (after tax and minority interest), compared to net
investment gains of $302.2 million (after tax and minority interest) in the
comparable period of the prior year. The increase in net investment losses is
due primarily to a loss of $352.9 million (after tax and minority interest)
from CNA's sale of its individual life insurance business and losses related
to derivative securities discussed above.
Net income attributable to Carolina Group stock for the first nine months of
2004 was $128.4 million or $2.21 per Carolina Group share, compared to $80.4
million or $2.01 per Carolina Group share in the comparable period of the
prior year.
Consolidated revenues in the first nine months of 2004 amounted to $11.2
billion compared to $12.1 billion in the comparable period of the prior year.
The decline in revenues reflects the sale of CNA's group benefits and
individual life insurance businesses as well as the impact of the $618.6
million pretax investment loss related to the life sale.
# # #
At September 30, 2004, there were 185,499,300 shares of Loews common stock
outstanding and 57,966,750 shares of Carolina Group stock outstanding.
Depending on market conditions, the Company from time to time purchases shares
of its, and its subsidiaries', outstanding common stock in the open market or
otherwise.
The Company has two classes of common stock, Carolina Group stock, a
tracking stock intended to reflect the economic performance of a group of the
Company's assets and liabilities, called the Carolina Group, principally
consisting of the Company's subsidiary Lorillard, Inc. and Loews common stock,
representing the economic performance of the Company's remaining assets,
including the interest in the Carolina Group not represented by Carolina Group
stock. At September 30, 2004, the outstanding Carolina Group stock represents
a 33.43% economic interest in the economic performance of the Carolina Group.
A conference call to discuss the third quarter results of Loews Corporation
has been scheduled for 11:00 a.m. EST, Thursday, October 28, 2004. A live
broadcast of the call will be available online at the Loews Corporation
website (www.loews.com). Please go to the website at least ten minutes before
the event begins to register and to download and install any necessary audio
software. Those interested in participating in the question and answer session
of the conference call should dial (877) 692-2592. An online replay will be
available at the Company's website following the call.
A conference call to discuss the third quarter results of CNA has been
scheduled for 10:00 a.m. EST, Thursday, October 28, 2004. A live broadcast of
the call will be available online at the CNA website
(http://investors.cna.com). Please go to the website at least ten minutes
before the event begins to register and to download and install any necessary
audio software. Those interested in participating in the question and answer
session of the conference call should dial (800) 665-0430. An online replay
will be available at CNA's website following the call.
Page 3 of 6
FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not historical facts
are "forward-looking statements" within the meaning of the federal securities
laws. Forward-looking statements are inherently uncertain and subject to a
variety of risks that could cause actual results to differ materially from
those expected by management of the Company and CNA. A discussion of the
important risk factors and other considerations that could materially impact
these matters as well as the Company's overall business and financial
performance can be found in the Company's reports filed with the Securities
and Exchange Commission and readers of this release are urged to review those
reports carefully when considering these forward-looking statements. Copies of
these reports are available through the Company's website (www.loews.com).
Given these risk factors, investors and analysts should not place undue
reliance on forward-looking statements. Any such forward-looking statements
speak only as of the date of this press release. The Company expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statement to reflect any change in the
Company's expectations with regard thereto or any change in events, conditions
or circumstances on which any forward-looking statement is based.
Page 4 of 6
Loews Corporation and Subsidiaries
Financial Review
September 30,
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Three Months Nine Months
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2004 2003 2004 2003
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(Amounts in millions, except per share data)
<s> <c> <c> <c> <c>
Revenues:
Insurance premiums and net investment income (a) $ 2,290.5 $ 2,678.1 $ 7,141.9 $ 8,479.4
Manufactured products (b) 918.0 880.1 2,625.5 2,578.4
Other (c) 576.9 381.8 1,423.7 1,067.5
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Total 3,785.4 3,940.0 11,191.1 12,125.3
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Expenses:
Insurance claims & policyholders' benefits 1,596.4 4,341.7 4,859.3 8,319.6
Cost of manufactured products sold (b) 523.7 532.7 1,558.6 1,489.6
Other (d) 1,262.9 1,616.2 3,736.6 4,281.7
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Total 3,383.0 6,490.6 10,154.5 14,090.9
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402.4 (2,550.6) 1,036.6 (1,965.6)
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Income tax expense 120.8 (916.4) 289.4 (735.3)
Minority interest 4.0 (195.5) 18.7 (196.8)
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Total 124.8 (1,111.9) 308.1 (932.1)
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Income (loss) from continuing operations 277.6 (1,438.7) 728.5 (1,033.5)
Discontinued operations-net (e) 55.8 55.4
---------------------------------------------
Net income (loss) $ 277.6 $(1,382.9) $ 728.5 $ (978.1)
=============================================
Net (loss) income attributable to:
Loews common stock:
Income (loss) from continuing operations $ 224.2 $(1,465.5) $ 600.1 $(1,113.9)
Discontinued operations-net (e) 55.8 55.4
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Loews common stock 224.2 (1,409.7) 600.1 (1,058.5)
Carolina Group stock (f) 53.4 26.8 128.4 80.4
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$ 277.6 $(1,382.9) $ 728.5 $ (978.1)
=============================================
Income (loss) per share of Loews common stock (g):
Income (loss) from continuing operations $ 1.21 $ (7.90) $ 3.24 $ (6.01)
Discontinued operations-net 0.30 0.30
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Net income (loss) $ 1.21 $ (7.60) $ 3.24 $ (5.71)
=============================================
Net income per share of Carolina Group stock (g) $ 0.92 $ 0.67 $ 2.21 $ 2.01
=============================================
Weighted number of shares outstanding:
Loews common stock 185.49 185.45 185.48 185.45
Carolina Group stock 57.97 39.91 57.97 39.91
(a) Includes investment gains (losses) of $(36.8), $179.5, $(349.2) and $503.2 for the
respective periods. The nine months ended September 30, 2004 includes a loss of $618.6
related to CNA's sale of its individual life insurance business.
(b) Includes excise taxes of $167.9, $173.1, $493.6 and $493.4 paid on sales of manufactured
products for the respective periods.
(c) Includes income of $179.3 ($116.5 after taxes) in the three and nine months ended
September 30, 2004 from an affiliate's sale of four ultra-large crude oil tankers.
(d) Includes a $26.0 charge ($16.8 after taxes) to settle litigation with tobacco growers and a
$28.0 charge ($17.1 after taxes) to resolve indemnification claims and trademark matters in
connection with the 1977 sale by Lorillard of its international business in the nine months
ended September 30, 2003.
(e) Includes a gain of $56.7 in the three and nine months ended September 30, 2003 from the
sale of a hotel property.
(f) Represents 33.43%, 23.01%, 33.43% and 23.01% of the economic interest in the Carolina
Group for the respective periods.
(g) Earnings per common share-assuming dilution is not presented because securities that could
potentially dilute basic earnings per common share in the future would have been
insignificant or antidilutive for the periods presented.
Page 5 of 6
Loews Corporation and Subsidiaries
Additional Financial Information
September 30,
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Three Months Nine Months
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2004 2003 2004 2003
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(In millions)
<s> <c> <c> <c> <c>
Revenues:
CNA Financial $2,379.3 $ 2,561.5 $ 7,659.8 $ 8,202.7
Lorillard (a) 886.7 854.0 2,536.2 2,497.4
Loews Hotels 66.9 65.9 233.9 213.5
Diamond Offshore 209.7 185.0 583.3 504.9
Texas Gas 47.2 45.0 185.3 68.1
Investment income-net and other (b) (c) 232.4 49.1 341.8 135.5
---------------------------------------------
3,822.2 3,760.5 11,540.3 11,622.1
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Investment gains (losses):
Other (d) (62.2) 164.3 (411.4) 476.9
Corporate and other 25.4 15.2 62.2 26.3
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(36.8) 179.5 (349.2) 503.2
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Total $3,785.4 $ 3,940.0 $11,191.1 $12,125.3
=============================================
Income (loss) before taxes:
CNA Financial $ (8.6) $(2,940.9) $ 504.0 $(3,053,9)
Lorillard (e) (f) 210.8 196.9 535.0 578.5
Loews Hotels (1.2) (0.1) 23.1 17.6
Diamond Offshore 1.4 (8.4) (29.1) (56.1)
Texas Gas 1.8 4.1 53.3 6.7
Investment income-net and other (b) (c) (g) 148.7 (27.0) 90.4 (92.8)
---------------------------------------------
352.9 (2,775.4) 1,176.7 (2,600.0)
---------------------------------------------
Investment gains (losses):
CNA Financial (d) (62.2) 164.3 (411.4) 476.9
Corporate and other 25.4 17.1 62.0 28.7
---------------------------------------------
(36.8) 181.4 (349.4) 505.6
---------------------------------------------
Loews common stock 316.1 (2,594.0) 827.3 (2,094.4)
Carolina Group stock (h) 86.3 43.4 209.3 128.8
---------------------------------------------
Total $ 402.4 $ (2,550.6) $1,036.6 $(1,965.6)
=============================================
Net income (loss):
CNA Financial $ 16.8 $ (1,675.5) $ 370.2 $(1,708.2)
Lorillard (e) (f) 130.5 121.9 328.3 361.2
Loews Hotels (0.8) 14.0 11.2
Diamond Offshore 0.1 (5.1) (13.5) (26.5)
Texas Gas 1.0 2.2 32.0 3.8
Investment income-net and other (b) (c) (g) 98.3 (16.8) 60.5 (57.6)
---------------------------------------------
245.9 (1,573.3) 791.5 (1,416.1)
---------------------------------------------
Investment gains (losses):
CNA Financial (d) (38.2) 94.7 (231.6) 281.2
Corporate and other 16.5 13.1 40.2 21.0
---------------------------------------------
(21.7) 107.8 (191.4) 302.2
---------------------------------------------
Income (loss) from continuing operations 224.2 (1,465.5) 600.1 (1,113.9)
Discontinued operations-net (i) 55.8 55.4
---------------------------------------------
Loews common stock 224.2 (1,409.7) 600.1 (1,058.5)
Carolina Group stock (h) 53.4 26.8 128.4 80.4
---------------------------------------------
Total $ 277.6 $ (1,382.9) $ 728.5 $ (978.1)
=============================================
(a) Includes excise taxes of $167.9, $173.1, $493.6 and $493.4 paid on sales of manufactured
products for the respective periods.
(b) Consists primarily of corporate investment income, interest expenses, operations of Bulova
Corporation and other unallocated expenses.
(c) Includes income of $179.3 ($116.5 after taxes) in the three and nine months ended
September 30, 2004 from an affiliate's sale of four ultra-large crude oil tankers.
(d) Includes a loss of $618.6 ($352.9 after tax and minority interest) related to CNA's sale of
its individual life insurance business for the nine months ended September 30, 2004.
(e) The Loews Group's intergroup interest in the earnings of the Carolina Group declined from
76.99% in 2003 to 66.57% in 2004 due to the sale of Carolina Group stock by Loews in
November of 2003.
(f) Includes a $26.0 charge ($16.8 after taxes) to settle litigation with tobacco growers and a
$28.0 charge ($17.1 after taxes) to resolve indemnification claims and trademark matters in
connection with the 1977 sale by Lorillard of its international business in the nine months
ended September 30, 2003.
(g) Includes additional interest expense of $17.0 ($11.1 after taxes) for the the nine months
ended September 30, 2004 related to charges from the April 12, 2004 early redemption of
$300.0 principal amount of the Company's 7.625% notes.
(h) Represents 33.43%, 23.01%, 33.43% and 23.01% of the economic interest in the Carolina
Group for the respective periods.
(i) Includes a gain of $56.7 in the three and nine months ended September 30, 2003 from the
sale of a hotel property.
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